Impact of PDGM on Home Health Care Providers

In a recent article, “Home Health Care Providers Transitioning to Patient-Driven Groupings Model (PDGM),” we discussed the changes to the home health payment system made by the Centers for Medicare & Medicaid Services (CMS). The changes are set to go into effect January 1, 2020.

One of the changes requires home health services to classify the primary reason a person needs care into one of six Clinical Categories or Groups: musculoskeletal rehabilitation; neuro/stroke rehabilitation; wounds (both surgical and non-surgical); behavioral health (including substance use disorder); complex nursing interventions; and medication management, teaching, and assessment. In other words, upon referral and before admission, a patient will be grouped into one of these six categories. If an ICD-10 code listed as the principal reason for providing care does not correlate to one of these Clinical Groups, there will be no payment for that 30-day payment period. As a result, with PDGM, physicians will need to understand that the principal diagnosis for a home health episode of care must be assigned to one of the clinical groups in order for the home health agency to be paid appropriately for the patient care.

Additionally, home care agencies will need to review their patient care protocols to ensure proper treatment and payment for that treatment. This means conducting more thorough patient assessments, including collecting complete patient health histories with a recording of comorbidities; collaborating between cross-functional teams to provide coordinated care; utilizing technology further; and developing a strong understanding of OASIS requirements by clinicians and coders alike.

Another change under the PDGM eliminates therapy-visit volume as a determining factor in calculating reimbursements. This means therapy will no longer be a guaranteed revenue-driver for home health agencies. Prior to making any therapy changes to the services provided because of PDGM, home health agencies are advised to consult with therapists to ensure that patients continue to receive the services that they need, rather than just assuming therapy is one of those services that can be easily cut. According to Home Health Care News, “while PDGM will change providers’ revenue streams, it won’t change the conditions and illnesses of their patients. On top of that, the need to improve outcomes becomes even more important, as the reimbursement  [under PDGM] is more value-based than volume-based.” 

Manchester Specialty Programs specializes in insuring Home Health Care, Allied Health Care and Human/Social Services organizations. We will continue to keep you informed on PDGM its impact on home health care providers. For more information about how we can help you protect your insureds, please contact us at 855.972.9399.